3 Things Every Home Buyer Must Do Before Buying

3 Things Every Home Buyer Must Do Before Buying

1.    Get a loan pre-approval, and that means more than a pre-qualification. A loan pre-approval means income and assets have been verified, and you know exactly the purchase price for which you are qualified. At this stage, all your lender will be waiting for from you is the property you intend to purchase.

2.    Add together your future, monthly mortgage payment and cost of homeownership. Once you know the purchase price for which you are qualified, your lender will most likely be able to tell you approximately the amount of your new mortgage payment. Ask the following questions:

What will my monthly mortgage payment be?

Your monthly mortgage payment should include principal, interest, property taxes and homeowner’s insurance. Your property taxes and homeowner’s insurance portion go to an escrow account each month. Your loan servicer will pay your property taxes and annual insurance premium when they become due out of that escrow account.  

What will be the costs to maintain my new home?

Some things to consider (not inclusive list): landscape maintenance, HVAC maintenance, exterior paint, window and door maintenance, pest extermination, roof maintenance.

How much are the utilities each month?

Electricity, gas, water, trash and sewer fees

Are there any Homeowner’s Association monthly fees?

Homes that are located in a Homeowner’s Association have monthly fees, which you pay outside of your monthly mortgage payment. In California, Homeowner’s Association fees are a homeowner’s responsibility. Non-payment of HOA fees can result in fines, penalties, property lien and eventual foreclosure.

Are there any hidden costs?

For example, will you be driving farther to and from work? Tally up gas costs and added extra wear and tear on your vehicle.

In summary, assess the monthly costs of homeownership: Add up the cost of maintenance, utility bills, HOA dues (if any) and any other hidden costs you foresee and subtract from your monthly income.

• Taxes
• Homeowner’s Association dues (if any, and will vary from community to community)
• Homeowner’s insurance, or Hazard insurance
• Cost of maintenance of your new home
• Utility bills
• Hidden costs

3.    Look at your monthly finances. Subtract future mortgage payment and costs from your monthly income. Are you comfortable with the numbers? If not, you may want to make some adjustments. Perhaps buy a home that costs less, or purchase in a community that does not have Homeowner’s Association fees, or in a community that has lower property taxes.

Only you can decide the amount you will be comfortable paying each month.

Be prepared when buying a home in today’s uncertain real estate market. Studies have shown that home buyers who have “shopped” their mortgage loan tend to get better rates and terms than home buyers who rushed getting a mortgage loan at the last minute.

The bottom line is not what the monthly mortgage payment will be, but the monthly cost of homeownership. Overlooking other costs and how they fit in with your larger financial picture causes regret later.

The three main points prior to home buying are: shop for a mortgage loan early, assess the costs of homeownership, tally up costs, monthly mortgage payment and subtract from income, and decide what is right for you.

If you would like more information on home buying in Temecula Valley California, call direct 951.491.4063 for a free consultation at no-obligation.

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Pamela Seley, REALTOR®
Short Sale Resource | CA DRE lic # 01824145
www.temeculavalleyhome.com | Dir 951.491.4063 | Email pamelaseley@gmail.com

Serving Southwest Riverside County California | Temecula, Murrieta, Menifee, Winchester, Lake Elsinore, Canyon Lake, Corona, Wildomar,  Hemet and San Jacinto Valley

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All information deemed reliable, but not guaranteed. Copyright © 2009-2011 by Pamela Seley, REALTOR®